NEW YORK - Add gBox Inc. to the growing list of online music services hoping to chip away at iTunes's dominance.
The Cupertino, Calif., startup was forced out of a stealth mode when
Universal Music Group announced late Thursday it would test sales of
some digital music without the customary copy-protection technology.
Under the program, gBox will get referrals through ads Universal will
buy through search leader Google Inc., gBox Chief Executive Tammy Artim
said Friday.
Google will get standard advertising fees rather than a cut of sales
under the arrangement. The ads, which would appear when a Google user
searches for specific terms such as the name of an artist, will direct
the user to gBox.
The arrangement with Universal and gBox is separate from Google's music
search service, which directs users to online music stores when they
search for specific albums or artists. The company says it does not get
paid for such referrals, and it does not restrict links to a single
retailer.
Google, which has said it has no plans to create a music store of its
own, described the new arrangement as strictly an advertising
relationship.
Songs at gBox cost 99 cents each. For the Universal songs that are part
of the test, gBox will offer an MP3 version free of copy-protection
technology known as digital-rights management, or DRM. A DRM-enabled
version will be available at the same price.
and CD burning.
Although DRM can help stem illegal
copying, it can also frustrate consumers by limiting the type of device
or number of computers on which they can listen.
Copy-protected songs sold through Apple's market-leading iTunes store
generally won't play on devices other than its popular iPod digital
player, and iPods won't play DRM-enabled songs bought at rival music
stores, including gBox.
Although many independent music labels have for years sold their tunes
without copy restrictions, the major recording companies have resisted.
Earlier this year, Britain's EMI Group PLC became the first of the
major labels to embrace DRM-free tunes, letting Apple sell versions of
songs with higher audio quality and without any built-in copying
hurdles.
The test by Vivendi SA's Universal Music Group, while only encompassing
a portion of its catalog, is significant because Universal is the
world's largest recording company. That raises the prospect that other
major labels could follow.
Universal Music will make DRM-free songs available Aug. 21 to Jan. 31. Amazon.com
Inc., Wal-Mart Stores Inc., Best Buy Co. and RealNetworks Inc.'s
Rhapsody are among the other retailers selling such tracks, but only
gBox will get Universal's Google referrals.
Although gBox won't
formally launch until Aug. 21, it already has a site with music from
Sony Corp. and independent labels. Artim said the company has
negotiated deals with other labels, but could not disclose them until
the launch.
She also said gBox was working with other major labels to sell DRM-free tracks like Universal's, but such talks are ongoing.
GBox now works only with Microsoft Corp.'s Internet Explorer browser on
Windows-based computers, but Firefox support will come by the launch
date, Artim said.
It won't be compatible with Apple's Macintosh computers, however. Even
though DRM-free tracks can play on any computer, the DRM versions
won't, and gBox didn't want to confuse customers, Artim said.
GBox also is developing a "wish list" feature - software code that
users can place on their blogs or social-networking profiles at News
Corp.'s MySpace, Facebook and other sites. Friends visiting the blog or
profile can buy a song for that user through gBox.
In relying on referrals through Google and social-networking sites,
gBox is taking a different approach to marketing. Other retailers tend
to drive music buyers to the store's home page to discover new songs
and make purchases there.
"Instead of doing marketing and (advertising on) billboards on Highway
101 to go to gBox," Artim said, "we want to take advantage of the viral
element that has been so successful for companies in the past."
